Case Study: Ministry of Sound

Case Study: Ministry of Sound

1.0 Important Issues in The Ministry's Environment

1.1 Early Years (1990s)

In the early years, the Ministry's environment is mainly focus on the new dance club. Their chief executive was James Palumbo. However, they face the problem of drug-dealing by their security team. As a result, Palumbo persisted in making his club a safer and cleaner environment. He changed his security team and hired a psychoanalyst to solve the gangland threat. Their club culture has changed from an underground movement with drug-dealing into a mainstream youth market activity. In mid 1990s, the business developed in many directions. They start to encounter in magazine, radio show, recording business and merchandising logo business. They have also created their own distinctive logo and brand.

1.2 Latest Period (2000s)

In the early year of 2000, 3i acquired Ministry's equity and this has made the spread of the dance music gospel worldwide. In 2002, Ministry dance club started to become outdated as life performances are more preferred. As a consequence Ministry's business was at crisis. When Mark Rodol replaced James Palumbo as the chief executive, he launched a strategic review of the whole business and saw high potential in continued merchandising. In addition, Rodol also reorganised the Ministry, leading to several management departures.

2.0 Opportunities For The Ministry in 2004

As more and more home is equipped by the broadband services, the company may have an opportunity to expand their business by online broadcasting their music channel. The growing rates of broadband users can be evidenced by the increase number of users from 82 million in 2003 to 319.9 million in 2008.

PlayStation has shown a triple-digit growth, the site visits rate increased from 646,000 to 1.5 million in March 2004 and it ranked seventh in the top 10 based on site visits. This indicates that the company has an opportunity to increase their sales of PlayStation games in 2004.

The demand for branded clothing will be increased. Additionally, as the margin for the wholesale costs adds between 80% and 100%, this would be a prospect for the company to earn more profit in merchandising branded clothing.

3.0 Threats Facing The Ministry in 2004

The threat is the dance culture has become outdated as preferences of audiences have switched to live music performance. Live music is usually performed by more well-known music artists, disc jockeys, jazz musician and orchestras. Young people are more attracted to this kind of live performance. The outdated dance culture can also be evidenced by the drop in sales of dance music album to a ten year low and superclubs such as Liverpool's cream had ceased their business.

Moreover, venture capital investment in third quarter of year 2004 has reduced. This would affect the Ministry's venture capitalist, 3i, to reduce their capital invested in the company.

Also, as the investment in entertainment and media industry has also decreased, this may affect the company not being able to reach their targeted turnover of $ 5 million by 2006.

4.0 Identification Of Capabilities

One of the capabilities is changing the security team to make the club safer and cleaner from drug. This is one of the strategies for the Ministry to attain the objectives of increase the value of the club. This means that Palumbo as the CEO of the company would like to make the club to become a cleaner and safer club, instead of letting the drug dealer to commit their drug trading in the club.

Besides, Ministry of Sound has built a global entertainment business based on the creativity and quality of a brand. On the other hand, a distinctive logo and brand for the Ministry has been established and being used widely in clothing. 'Super-clubs' was first developed by the Ministry. They also engage in large merchandising clothing business.

The Ministry has launched a magazine that aimed at clubbers and a radio show that broadcasts in London and central Scotland. Moreover, it has the experience in having joint venture with Relentless and became the largest independent record-label. The company is also distributing their own albums. This shows that the company is capable of recording an album themselves. In addition, the Ministry's has the capability in hosting tour with 300 events worldwide.

5.0 Relevance Of Capabilities

In 2004, the good value which is clean and safe environment of the club is being maintained. This is shown by the potential of senior citizens to visit and spend their time in the club would increased. This means that the club activities are still going on.

Moreover, they are still continuing in the recording and merchandising business. This is shown by Mark Rodol still continue to merchandise in branded clothing, specialist holidays and consumer hi-fi products.

The radio shows and touring division of the ministry are still in progress. They are expanding them globally.

However, the Ministry's magazines have stopped published in 2004. They are incapable of attracting the readers to buy their magazines in the market. Their capability in targeting the market for the magazine has failed.

Their joint venture with Relentless has also failed. This indicates that the joint venture in producing recording product is irrelevant for the company.

6.0 Strengths Of The Ministry in 2004

Palumbo as the chairman of the Ministry in 2004 adopted the analytical, business-focused approach in managing the company. This is a strength as most of the recording companies are not using such approach and this made them has to end their business.

The replacement of chief executive to Mark Rodol in February 2003 has given the Ministry a chance to review and change its old strategies to improve its efficiency and effectiveness in performing their business.

The Annual 2004, which is released annually by Ministry of Sound, has won awards consecutively for Best Mix CD Compilations from numerous Dance Music Awards Shows. This compilation